Prime Minister Michael Manley (left) welcoming the Prime Minister of Barbados, the Hon. Errol Barrow, to Jamaica House in March,1972. Both heads of Government discussed informally a number of matters of mutual interest. - File

A comparison between Jamaica and Barbados during the 1970s throws up some startling information. In terms of the content of the policy supported by Manley and Barrow, the two countries were not that far apart; both were responding to burgeoning social pressures by crafting welfare states.

In fact, it is possible to argue that, at points, 'conservative' Barbados followed a more progressive course, e.g., in its relationship with Cuba and in maintaining open foreign exchange windows. This latter fact may come as a surprise to many, but points precisely to a key difference between the Manley and Barrow strategies: Manley located his actions within a strongly ideological framework.

Barrow, on the other hand, took a decidedly pragmatic approach to ideology as was evident in a speech which he delivered at the U.N., December 9, 1966: "We shall not involve ourselves in sterile ideological wranglings because we are exponents not of the diplomacy of power, but of the diplomacy of peace and prosperity. We are friends of all, satellites of none." (This statement set out the foreign policy direction of successive Barbadian Governments).

Barbados' warm embrace of Cuba was accompanied therefore by rhetoric that allayed American fears about the further spread of communism in the region. Juxtaposed to Manley's infamous and fiery rhetoric - "We are not for sale!"- and his oftentimes deliberate baiting of the American giant, Barbados' approach seems almost cowardly and somewhat colourless; but, in hindsight, this eschewing of radical rhetoric may be key to understanding why Barbados is ahead of Jamaica today in all measures of development.

The programmes that Barrow implemented between 1961-1976 were adapted in large part from the social democratic proposals of the Democratic League that his uncle advanced in the 1920s.

Barrow was able to translate the aspirations of the ordinary person into policies that were seen as beneficial for the DLP, the capitalist sector and other groups in the society, somewhat akin to the multi-class alliance that Manley managed to forge in his first term in office.

The DLP Manifesto for the 1961 elections had proposals for economic development based on a three-pronged drive for rapid industrial development, agricultural diversification and a bigger tourist trade.

Proposals

Some of the specific proposals were: a guaranteed minimum weekly wage for agricultural workers; abolition of fee paying in grant-aided secondary schools; compulsory education up to 16; the establishment of small cottage hospitals in rural areas (polyclinics); health insurance as part of a social security scheme; maternity leave for women; the inclusion of domestic servants within the protection of the Workmen's Compensation Act; reduction of the voting age from 21 to 18.

Like the Manley regime, once the DLP came into power it set about implementing its programme with speed and efficiency that captured the imagination of the people.

Along with the specific proposals contained in its Manifesto, the DLP provided work for hundreds of unemployed by a crash programme; established a number of secondary industries on the basis of tax exemptions; and introduced a school meals service. Overall, the Government gave the people a feeling of optimism and expectancy by the emphasis it placed on its policy for economic development.

The Manley regime traversed a similar welfare-focussed route while making ideology a principal element of national development guided by a Democratic Socialist model. This was accompanied by greater government intervention in the economy and closer relations with Cuba, other communist, socialist and non-aligned countries.

Democratic socialism

However, as evidenced by the decision not to nationalise the bauxite and alumina industry, democratic socialism was not a radical, revolutionary philosophy, but it did involve policy shifts. These included imposing barriers on trade in the form of quantitative restrictions, licensing requirements and higher tariffs; the monopolisation of certain imported commodities through a state trading corporation; an emphasis on national self-reliance; efforts towards land reform and employee stock ownership; and the move to nationalise, in order to shift ownership to the people of the country.

Compared to Manley, Barrow was so leery of the possible negative impact of certain kinds of rhetoric that he imposed the Public Order Act of 1970 to deal with the black radical upsurge that might have resulted from Black Power ideology that was taking hold in the region at that time.

Barrow was aware that the capital accumulation strategy that he was following was built upon, among other things, foreign investor confidence, and American tolerance, if not indulgence, and this could not tolerate a black radical upsurge. It is in this light that Hillbourne Watson comments that Barrow knew how to take the pulse of popular sentiment and how to demobilise it.

A further important difference between the two regimes concerned the financing of some of these welfare measures; in Barbados, e.g., both the school meals programme and free secondary education required Supplemental Budgetary Appropriations (paid for with the people's taxes). Other major government investments in roads, hospitals, schools, public housing and buildings were financed by loans from overseas for long maturities and at reasonable rates.

'Free education'

In contrast, in mid-May 1974, Manley announced in his budget presentation the breakdown of negotiations with the bauxite companies and the imposition of a levy, followed later in the same budget presentation by the announcement of "free education."

This engendered several responses, including the restriction of new investment in the bauxite and alumina sector, a decline in the financing of recurrent expenditure on the Jamaican bauxite and alumina plants and a reduction in FDI in other sectors, as the international investment community expressed its displeasure with the actions of the Jamaican Government.

The unilateral imposition of a bauxite production levy was among a series of ill-advised policy decisions which included the imposition of foreign exchange controls, and the beginning of a long period of chronic deficit financing with the monetisation of deficits through the acquiescence of the Central Bank.

The Central Bank of Barbados (BCB) was established in 1972 and it took the opposite course; from its inception the BCB resisted pressure for large-scale lending to the government which might have undermined its statutory responsibility to protect the value of the currency.

Indeed, the Barrow Government maintained fiscal discipline in the 1970s and for the first few years in the 1980s. Importantly, Jamaica's imposition of exchange controls on current account transactions stands in sharp contrast to the Barbadian attempt to maintain a relatively liberal foreign exchange regime for pragmatic reasons.

Jamaica also suffered the negative impact of the loss of skills and capital flight as members of the private sector became concerned that the shift in ideology would affect the protection of property rights. The administration's land-reform plans may have influenced perceptions about property right protection although, significantly, unlike Zimbabwe, Jamaica never initiated any full-scale compulsory government acquisition of land.

Economy grew

Unsurprisingly, when all of the above is taken into account, the average rate of growth of the Jamaican economy during the 1970s was 0.6 per cent. It is significant that all the growth in the decade occurred in the early 1970s. The economy grew at a rate of 5.7 per cent between 1970 and 1973, as a spill-over from the growth performance of the 1960s.

Clearly, there was a real problem at the level of rhetoric. Manley's determination to give a strong ideological component to Jamaica's development led to a number of negative consequences: investors were frightened away, the local business community engaged in capital flight and disinvestment, and the American Government arrayed itself against Jamaica.

More the pity is that there was a serious disconnect between the ideology and substance of the Democratic Socialist strategy which Manley so loudly trumpeted. Jamaica paid the price for radical change without receiving any of the supposed benefits. Perhaps the real failure of the 1970s, therefore, was to paint what could have been a pragmatic project with a radical ideology, maybe because Manley found it more attractive.

Produced by the Jamaican Economy since Independence Project, the University of the West Indies, Mona. Email jep@uwimona.edu.jm.